Issue 88.5
Bills Filed Restricting Foreign Ownership of Real Estate
In the previous 87th Texas Legislative Session we saw passage into law of SB 2116 prohibiting contracts or other agreements with certain foreign-owned companies in connection with critical infrastructure in this state. This issue of restrictions on foreign ownership is front and center this session. Numerous trade groups directly impacted by these proposed bills (Apartment Assoc., Assoc. of Builders, Assoc. of Realtors, Independent Bankers Assoc., Land Title Assoc., Mortgage Bankers Assoc., and Texas Bankers Assoc.) have all raised concerns and met with sponsoring legislators to better understand intended goals and share their concerns about the bills.
While the intent of protect national security interests from bad actors from China, Iran, North Korea, or Russia.is noble, the above associations are seeking to ensure the purchase and sale of real property is not made overly burdensome for all Texans. An increased compliance burden will be created on every loan file as the citizenship of all borrowers, particularly responsible individuals of entity borrowers will need to be verified.
Our weekly Highlight provides some additional insight into these bills.
Weekly Highlight
• HB 1075 Harris | Button | Jetton – Relating to certain property interests of a foreign government in agricultural land. The bill is narrower in that it only applies to a foreign government or an entity owned or controlled by a foreign government may not purchase, lease, or otherwise acquire title to or an interest in agricultural land. However, it is also broader in applying to all foreign governments. These transactions are void, but it does allow grandfathering prior to August 31, 2023.
• SB 147 Kolkhorst, Lois – Relating to the purchase of or acquisition of title to real property by certain aliens or foreign entities. This covers citizens, governmental entities directly or indirectly held or controlled by the governments of China, Iran, North Korea, or Russia. As well as any entity headquartered in those countries, or a citizen of these countries holds ownership or controlling interest in an entity.
• SB 552 Campbell | Parker – Relating to prohibiting contracts or other agreements with certain foreign-owned companies in connection with agricultural land. The prohibition applies to individuals with citizenship of China, Iran, North Korea, or Russia or an entity owned or controlled by those individuals. Due to restrictive federal banking guidance on Acquisition, Development, and Construction lending many banks book loans as agricultural until the housing plans are ready to implement.
To read the full text of any of these bills you can go to Texas Legislature Online.
New Bills
• HB 1012 González, Jessica – Relating to the prohibition of certain discrimination; authorizing civil penalties.
• HB 1075 Harris | Cody | Button | Jetton – Relating to certain property interests of a foreign government in agricultural land.
• SB 552 Campbell, Donna – Relating to prohibiting contracts or other agreements with certain foreign-owned companies in connection with agricultural land.
Previously Reported Bills
• HB 92 Landgraf, Brooks – Relating to the authority of a municipality, county, or property owners’ association to prohibit or regulate certain activities on residence homestead property.
• HB 207 Murr, Andrew – Relating to the exclusion of certain conveyances from classification as sham or pretended sales.
• HB 217 Murr, Andrew – (HB 217 was previously filed in 87th Session as HB 2621 but left pending in Committee without a vote.) Relating to the limitation on the amount of a subcontractor’s lien for labor or materials.
• HB 219 Noble, Candy – (HB 219 was previously filed in 87th Session as HB 3278 but left pending in Committee without a vote.) Relating to the release of a deed of trust or other contract lien securing a home loan after payoff by mortgagor.
• HB 264 Toth, Steve – (HB 264 was previously filed in 87th Session as HB 2284 it was approved in Committee and sent to Calendars.) Relating to requirements for the physical presence of a borrower for signing certain documents related to a home equity loan.
• HB 287 Johnson, Julie – Relating to payment of the replacement cost of damaged property under a homeowner’s, renter’s, or condominium owner’s insurance policy.
• HB 523 Vasut, Cody – Relating to the authority of an appraisal review board to direct changes in the appraisal roll and related appraisal records if a residence homestead is sold for less than the appraised value.
• HB 645 Toth, Steve – Relating to prohibiting financial institutions and other businesses from using value-based criteria.
• HB 697 Holland, Justin – Relating to seller’s disclosures regarding fuel gas piping in residential real property.
• HB 709 Harris, Cody – Relating to prohibiting the use of certain credit scores, including environmental, social, or governance scores and social credit scores, by certain financial institutions and other lenders in this state.
• HB 738 Gonzalez, Jessica – Relating to a right of first refusal applicable to the sale of housing developments that have received certain financial assistance administered by the Texas Department of Housing and Community Affairs.
• HB 886 Shaheen, Matt – (HB 886 was previously filed in 87th Session as HB 3857 but left pending in Committee without a vote.) Relating to requirements to file a property owners’ association assessment lien.
• HB 1056 Hinojosa, Gina – Relating to the registration of financial institutions and investment firms that lease residential real property.
• HB 1057 Hinojosa, Gina – Relating to restrictions on the purchase of a single-family home by an investment firm.
• HB 1195 Holland, Justin – Relating to the authority of a county to require photo Identification to file certain documents with the county clerk. This bill strikes the existing population threshold of 800,000 citizens and extends the existing authority to all Texas counties. (Companion to SB 319)
• HB 1244 Shine, Hugh – (HB 1244 was previously filed in 87th Session as HB 991 but never received a committee hearing.) Relating to the authority of the owner of a residence homestead to receive a discount for making an early payment of the ad valorem taxes on the homestead.
• HB 1256 Holland, Justin – Relating to seller’s disclosure notice concerning special districts in which residential real property is located.
• HB 1319 Shine, Hugh – Relating to the electronic payments required or permitted under the Property Tax Code; authorizing a fee.
• HB 1660 Capriglione, Giovanni – Relating to the process for notifying the attorney general of a breach of security of computerized data by persons doing business in this state.
• HB 1674 Holland, Justin – Relating to certain sales or purported sales of homestead property that are classified as loans. (Companion to SB 613)
• HB 1704 Walle, Armando – Relating to the establishment of the workforce housing capital investment fund program to fund the development of workforce housing in this state; authorizing a fee.
• HJR 20 Toth, Steve – (HJR 20 was previously filed in 87th Session as HJR 104 it was approved in Committee and sent to Calendars.) Proposing a constitutional amendment authorizing the legislature to provide for exceptions to the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
• HJR 29 Schofield, Mike – (HJR 29 was previously filed in 87th Session as HJR 43 but left pending in Committee without a vote.) Proposing a constitutional amendment providing that a residence homestead is not subject to seizure or sale for delinquent ad valorem taxes.
• SB 62 Zaffirini, Judith – Relating to posting certain documents and information related to certain real property sales on a county’s Internet website.
• SB 147 Kolkhorst, Lois – Relating to the purchase of or acquisition of title to real property by certain aliens or foreign entities.
• SB 319 Hall, Bob – Relating to the authority of a county to require photo Identification to file certain documents with the county clerk. This bill strikes the existing population threshold of 800,000 citizens and extends the existing authority to all Texas counties. (Companion to HB 1195)
• SB 570 West, Royce – (SB 570 was previously filed in 87th Session as SB 265 and its companion HB 1470 Rodriguez, Eddie, but neither received committee hearings.) Relating to the prohibition of housing discrimination on the basis of a person’s source of income and to the enforcement of that prohibition.
• SB 613 Springer, Drew – Relating to certain sales or purported sales of homestead property that are classified as loans. (Companion to HB 1674)
If you have questions about these specific bills or the Texas legislative process in general, please reach out to Doug Foster or one of our our firm’s attorneys or representatives at: https://www.mortgagelaw.com/our-team/